Feasibility Study on the Utilization of Methane Gas from the Landfill Site in Surgut, Russia

Global Environment Centre Foundation(GEC)

Reports of CDM/JI Feasibility Studies

Title of the researchFeasibility Study on the Utilization of Methane Gas from the Landfill Site in Surgut, Russia
FYFY 2004
Main research organizationShikoku Electric Power Co., Inc.
Research partner(s)Project site owner: CJSC Polygon Ltd.
OE: Japan Quality Assurance Organization (JQA)
Location of the projectSurgut Region, Khanti-Mansi autonomous district, Tyumen region, Russia
Summary of the research report (PDF)Summary(50kb)
Description of the projectThis project activity will capture landfill gas (hereinafter "LFG") generated from the landfill owned and operated by a public company CJSC Polygon Ltd. in Surgut, Russia. The LFG captured will be utilized for the fuel of a gas engine co-generation system (hereinafter "CGS") to restrain the LFG itself from the air diffusion and to reduce GHG emissions effectively.
The electricity and thermal energy supplied from the CGS will displace the energies from Polygon’s diesel engine generator and boiler which combust fossil fuel, therefore, it will reduce the fuel GHG emissions from them at the same time.
Sector of the projectWaste Management
Duration of the project activity/ crediting periodJanuary, 2008 ~ December, 2027 (20 years)
Baseline methodology/additionality(1) Baseline scenario: Russia and Surgut lacks legislation to enforce the LFG capture on landfills so far and has no plan to introduce the legislation for the moment, and the LFG generated from landfills are not considered as a problem. Because Surgut has an abundance of fossil fuel deposit and the energy supply is sufficient, the awareness on the energy conservation cannot be fostered. Additionally, LFG capture and utilization technology has not been disseminated yet. Thus, there is not any incentive to cost much time, effort, and money to introduce LFG capture and utilization system. Therefore, it is natural to think that "keeping the status-quo" will continue to release the LFG into the atmosphere, and the scenario that the LFG will not be captured to utilize and the landfill will keep releasing the LFG to the atmosphere is the highly probable baseline scenario.
(2) Baseline methodologies: ACM0001, AMS-I.C., I.D.
(3) The demonstration and assessment of additionality: This project is a JI project, thus only "Sub-Step 2b - Option III" and "Step 5" provided in the Tool are used for the demonstration and assessment of additionality.
First, we studied the project cash flow using only the revenue from the electricity and thermal energy sales without considering the revenue from the sale of ERUs according to the Tool. The project cash flow estimated shows that the total amount of the cash flow will not turn profitable even after 20 years of the project period – this project is very unattractive without the sale of ERUs.
Then, we estimated the project cash flow including the revenue from ERUs. The investment analysis verifies the attendant benefits derived from the sale of ERUs generated from this project activity. Therefore, implementation as a JI project will alleviate the economic and financial hurdles. The project IRR will be 12.1% when the cash value of ERU is 6US$/t-CO2, which is higher than the Russian government bond rates as a benchmark, which was between 7.8 ~ 8.0% in September 2004. This means that the project can be a profitable business for investors if it were registered as a JI activity.
Estimation of GHG emissions363,270 t-CO2 (Total amount in the project period, 20 years)
Monitoring methodology(1) Monitoring methodology: ACM0001, AMS-I.C., I.D.
(2) Monitoring plan: The amount of GHG emission reduction due to the project activity can be calculated by measuring the quantity of LFG utilized at the CGS and the flare stack, the average methane gas fraction of LFG, and the amount of the electricity and the thermal energy supplied from CGS.

Fig. Project Boundary and Monitoring Plan

ID1: Flowmeter - Quantity of LFG captured)
ID2: Temperature gauge – Temperature of LFG
ID3: Pressure gauge – Pressure of LFG
ID4: Methane gas analyzer – Average methane fraction of LFG
ID5: Flowmeter – Quantity of LFG used by CGS
ID6: Flowmeter – Quantity of LFG flared
ID7: Thermocouple – Surface temperature of flare
ID8: Methane gas analyzer – Average methane fraction of the exhaust gas of flare
ID9: Voltmeter – Net quantity of electricity displaced
ID10: Calorimeter – Net quantity of thermal energy displaced
Environmental impactThe possibility of the pollution due to the exhaust gas and wastewater, ambient noise, and vibration is assumed because the project activity will install mechanical equipment such as blowers, CGS, however, the landfill is located adequate away from residential zones and we think that the project will not give any damage to the environment. In terms of the possibility of these environmental impacts, we have obtained the opinions from the Surgut Municipal Environmental Commission that these factors do not cause any environmental concerns.
Issues and tasks for project implementationThe ratification by Russia realized the effect of Kyoto Protocol and Russian Federation will have to organize the requirements for JI such as calculation system for the domestic GHG emissions, Registry, Inventory, the establishment of DNA, JI guidelines, etc. We hope these requirements will be organized by Russia as soon as possible.
Speaking from the viewpoint of the economic efficiency, the payback period is estimated about ten years, the quantity of GHG emission reductions will be approximately 300,000 t-CO2, and the project IRR is estimated about 12% in case ERU unit price is 6US$/ t-CO2, therefore, the project activity will be economically profitable. On the other hand, it has possibilities of many challenging issues and risks, for instance, particular risks in Russia such as JI project approval risk, ERU transfer risk, market risks, etc. caused by the delay of Russian environmental consideration for JI. Considering the fact, we have to inquire cautiously into this project in detail for the realization in the future.
We are going to make efforts for the success of the project investigating further more in detail with keeping close watch on the movement of Russian government aftertime.
ValidationWe had an OE (Operational Entity) judged the preliminary JI determination for the draft PDD excluding site surveys.
The desk reviews on the determination were implemented twice and the final desk review report points out no CAR (Corrective Action Request) but a few CLs (Clarification) as follows:
・ The items concerning the Russian requirements for JI
・ The items concerning the Russian SD (Sustainable Development) policies
・ The items concerning the environmental impact analysis in Russia
These points are attributed to mainly the pending arrangement of the Russian organization for JI, hence, it is important to correspond to the change on the Russian movement and the condition of the Russian organization for JI.